August, 2020

Health vs. Economy

Politically Optimal Pandemic Policy
  • Mark Koyama

    Senior Fellow, F. A. Hayek Program for Advanced Study in Philosophy, Politics and Economics
  • Desiree A. Desierto

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Additional details

Find the article in Issue 41 of COVID Economics.

Pandemics have heterogeneous effects on the health and economic outcomes of members of the population. To stay in power, politician-policymakers have to consider the health vulnerability- economic vulnerability (HV–EV) profiles of their coalition. We show that the politically optimal pandemic policy (POPP) reveals the HV–EV profile of the smallest, rather than the largest, group in the coalition. The logic of political survival dictates that the preferences of the least loyal, most pivotal, members of the coalition determine policy.